EMPLOYMENT AGREEMENT
This Agreement (herein so called) is made and entered into as of the 1st
day of April, 1994 by and between Continental Waste Industries, Inc., a
Delaware corporation (hereinafter referred to as "Employer"), and Xxxxxxx X.
Xxxxxxx (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee, and Employee desires to be
employed by Employer as President, all upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1 EMPLOYMENT, DUTIES AND ACCEPTANCE.
1.1 EMPLOYMENT BY EMPLOYER. Employer employes Employee, for the
Employment Period (as herein defined), to render full-time services to
Employer. It is presently contemplated that Employee shall be President of a
newly formed or acquired subsidiary of Employer that will conduct business
similar to that of Employer outside of the United States. In connection
therewith, Employee shall manage such subsidiary's operations. Employee will
perform the duties that are consistent with such position as he shall
reasonably be directed to perform by Employer's President or Board of
Directors.
1.2 ACCEPTANCE OF EMPLOYMENT. Employee accepts such employment and
shall render the services described above.
1.3 PLACE OF EMPLOYMENT. Employee's principal place of employment
shall be Dayton, Ohio or as otherwise mutually agreed, subject to reasonable
travel as the rendering of the services hereunder may require.
2 TERM. The term of Employee's employment by Employer hereunder (the
"Employment Period") shall be for a period of three (3) years from the
effective date specified in Section 10 hereof subject to extension and
subject to the termination provisions of Sections 6 hereof. There shall be
automatic one (1) year extensions of the Employment Period thereafter unless
this Agreement is terminated upon 30 days written notice by Employer or
Employee unless superseded by subsequent Agreement by the parties.
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3 COMPENSATION.
3.1 BASE SALARY AND FIXED BONUS. During the Employment Period for
all services rendered by Employee under this Agreement, Employer shall pay
Employee a salary at the rate set forth in Schedule I during the first three
years hereof, with increases as the Board of Directors of Employer determines
from time to time payable in accordance with the customary payroll policy of
Employee in effect at the time such payment is made ("Base Salary") plus a
fixed annual non-discretionary bonus as set forth in Schedule I ("Fixed
Bonus") payable not less often than annually.
3.2 INCENTIVE COMPENSATION. Employee may receive as annual
incentive compensation a percentage of his base salary at the time of
payment, or such other amount as determined by the Board of Directors. The
payment of incentive compensation to Employee, if any, shall be within the
sole discretion of the Board of Directors and will be based on such factors
as deemed appropriate by the Board of Directors.
3.3 MEXICO DEVELOPMENT BONUS.
3.3.1 GENERAL. With respect to all waste related projects
developed by Employer or its affiliates in Mexico, Employee shall be
given 10% of each such project. The parties shall cause to be set up
a separate new corporation ("OBSA Entity") for each project in Mexico
of which Employee shall be issued 10% of the stock of each such
entity for nominal consideration (not to exceed $100) at a time when
the fair market value of such stock is equally nominal. In the
alternative, Employer may cause such stock to be transferred to
Employee even if it has greater than nominal value as long as (i)
such transfer does not result in taxable income to Employee until
sold by Employee; or (ii) Employer fully and promptly indemnifies
Employee for all taxes incurred as a result of such transfer.
3.3.2 BUY-SELL AGREEMENT. With respect to each OBSA Entity,
Employer and Employee shall enter into a Buy-Sell Agreement on the
following terms:
3.3.2.1 OPTIONS. The agreement shall require a purchase
by Employer of Employee's shares upon (i) Employee's death or
disability; or upon (ii) Employee giving Employer notice any
time during the five year period following his termination of
employment that he desires Employer to purchase his shares
(collectively "Triggering
EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXXXX/CONTINENTAL WASTE INDUSTRIES, INC. PAGE 2 OF 9
Events"). Any such purchase shall be at fair market value as of
the date of the Triggering Event. "Fair market value" of
Employee's shares means the fair market value of all the shares
of the OBSA Entity multiplied by Employee's percentage ownership
of all such shares (i.e. no premium for control). All disputes
with regards to the Buy-Sell Agreement or this Section 3.3 shall
be decided by binding arbitration before the American
Arbitration Association in accordance with its rules and
regulations. Any such arbitration shall be held in Chicago,
Illinois.
The agreement shall provide that the price for Employee's shares
shall be paid in four equal annual installments with interest at
the prime rate commencing with the date of the Triggering Event.
The first installment, together with all accrued interest, would
be due no later than 30 days after the Triggering Event and each
additional installment, together with all accrued interest,
would be due on the next three anniversary dates of the
Triggering Event.
3.3.2.2 DILUTION. The agreement shall provide that
Employer would not permit more than a 25% dilution of Employee's
shares in any event (except with Employee's written consent) and
any dilution shall only be done on a fair and equitable basis.
3.3.2.3 SALE TO THIRD PARTY. The agreement shall provide
that Employee shall have the right to sell his share in any
OBSA Entity to a third party provided that Employee first gives
Employer an opportunity to purchase such shares on the same
terms and conditions of such bona fide third party offer or at
the cash equivalent of such offer.
3.3.2.4 OTHER TERMS. The agreement shall contain such
other terms and provisions consistent with the foregoing as the
parties mutually agree upon.
3.3.3 ACCESS TO INFORMATION. Employee shall be given free
access to information regarding all OBSA Entities and related
operations until the earlier of five years after Employee's
termination of employment or the date Employee has sold all of his
shares in all OBSA Entities.
EMPLOYMENT AGREEMENT
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4 BENEFITS. Employee shall be entitled to such paid vacation, holidays,
sick leave, and shall be eligible for participation in such group insurance,
hospitalization, major medical, dental, profit sharing, stock options, and other
fringe benefit programs as those afforded executives of Employer; provided
however, that Employer shall provide in the Employee's name life insurance in
the face amount of not less than Two Hundred Fifty Thousand Dollars ($250,000)
and disability insurance providing for disability benefits of not less than Two
Hundred Fifty Thousand Dollars ($250,000) in the event of permanent total
disability (as defined in the insurance policy) of the Employee. In addition,
Employer agrees to reimburse Employee for all reasonable out-of-pocket expenses
incurred by Employee in the fulfillment of his duties hereunder, including
travel expenses. Such reimbursements will be made promptly, within thirty (30)
days of Employee's submission to Employer of an itemized list of such expenses,
together with receipts therefor indicating the date upon and the purpose for
which such expenses were incurred and such other information as may be
reasonably required from time to time by Employer to substantiate such
expenditures for federal income tax purposes.
5 STATUS AS EMPLOYEE. At all times during the Employment Period,
Employee shall be deemed to be an employee of Employer for purposes of
determining Employee's coverage under and eligibility to participate in, any
employee benefit plans or programs which Employer now has or may hereafter
initiate. In the event it is necessary to amend any such plan or program in
order to assure that Employee is not discriminated against thereunder, Employer
will promptly use its best efforts to make all such amendments or cause the same
to be made.
6 TERMINATION.
6.1 TERMINATION UPON DEATH. If employee dies during the Employment
Period, this Agreement shall terminate, except that the representative of
Employee's estate shall be entitled to receive the compensation herein
provided for in the month in which death occurs, a prorata portion of his Fixed
Bonus for such year, and the amount accrued and payable under Section 3.2
hereof less the amount of any outstanding loans.
6.2 TERMINATION UPON DISABILITY. If, during the Employment Period,
Employee becomes physically or mentally disabled, whether totally or partially,
so that Employee is substantially unable to perform his services hereunder for
(i) a period of six consecutive months; or (ii) for shorter periods aggregating
six months during any consecutive twelve month period, Employer may, at its
option, at any time after the last day of the six consecutive months of
disability or the day on which such shorter periods of disability during any
consecutive
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EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXXXX/CONTINENTAL WASTE INDUSTRIES, INC.
twelve month period equal an aggregate of six months, by written notice to
Employee, terminate Employee's employment hereunder. Upon such termination,
Employee shall be entitled to receive the compensation herein provided for the
month in which such termination occurs, a prorata portion of his Fixed Bonus for
such year, and the amount accrued and payable under Section 3.2 hereof less the
amount of any outstanding loans.
6.3 TERMINATION FOR CAUSE. If Employee commits a fraud upon the
Employer, malfeasance against the Employer, or habitual and willful neglect of
duties properly assigned other than by reason of illness, Employer may at any
time upon thirty days written notice to Employee terminate Employee's employment
hereunder. Upon such termination, except for accrued and unpaid compensation to
the date of termination, Employee shall have no right to receive any
compensation or benefit from Employer.
6.4 VOLUNTARY TERMINATION. In the event Employee voluntarily
terminates his employment with Employer, Employee shall have no right to receive
any compensation or benefit from Employer hereunder, except for accrued and
unpaid compensation due on the date of such termination.
7 CERTAIN COVENANTS OF EMPLOYEE.
7.1 COVENANTS AGAINST THE COMPETITION. Employee acknowledges that
(i) the principal businesses (the "Business") of Employer involve brokerage of
solid waste, transport and disposal, operation and management of solid waste
disposal facilities, consulting services for the solid waste industry, recycling
of solid waste and brokerage of recycling services and materials, and such other
related activities as Employer may become involved in; (ii) the Employer's
Business is international in scope; and (iii) his work for Employer has brought
him and will continue to bring him into close contact with many confidential
affairs not readily available to the public. For the purposes hereof,
"Employer" means Continental Waste Industries, Inc. and its subsidiaries. In
order to induce Employer to enter into this Agreement, Employee covenants and
agrees that:
7.1.1 NON-COMPETE.
(a) During Employee's employment with Employer, Employee shall not
(i) engage in a business which is competitive with the Employer's Business
for his own account; (ii) except for employment by Employer, enter the
employ of, or render any services to, any person engaged in such
activities; or (iii) become interested in any person engaged in a business
which is competitive with the Employer's Business, directly or indirectly,
as an
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EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXXXX/CONTINENTAL WASTE INDUSTRIES, INC.
individual, partner, shareholder, officer, director, principal, agent,
employee, trustee, consultant or in any other relationship or capacity;
PROVIDED, HOWEVER, that Employee may own, directly or indirectly, solely as
an investment, securities or any entity which are traded on any national
securities exchange or in the over-the-counter market if Employee (a) is
not a controlling person of, or a member of a group which controls, such
entity, or (b) does not, directly or indirectly, own 1% or more of any
class of securities of such entity; and
(b) for a period of two (2) years following the termination (whether
voluntarily or involuntary) of Employee's employment with Employer or any
of its affiliates or subsidiaries, Employee shall not compete with any
landfill project which is owned or operated by Employer at the time of
Employee's termination including diverting or attempting to divert any
customer of Employer or soliciting any employees of Employer or competing
with the collection activities at such project. Upon Employee's
termination, Employer will provide Employee with a list of its landfill
projects. If Employer later ceases to be the owner or operator of any such
listed project this covenant shall cease as to such project.
7.1.2 CONFIDENTIAL INFORMATION. During and after the term of
Employee's employment with Employer, provided that Employer is engaged in the
Business, Employee shall keep secret and retain in strictest confidence, and
shall not use for the benefit of himself or others except in connection with the
business and affairs of Employer, all confidential matters of Employer and its
subsidiaries or affiliates, including, without limitation, trade "know-how,"
secrets, customer lists, details of contracts, pricing policies, operational
methods, marketing plans or strategies, business acquisition plans, new
personnel acquisition plans, research projects, and other business affairs of
Employer, its subsidiaries, or affiliates, heretofore or hereafter, and shall
not disclose them to anyone either during or after employment by Employer,
except as required in the course of performing duties hereunder or with
Employer's express written consent.
7.1.3 PROPERTY OF EMPLOYER. All memoranda, notes, lists,
records and other documents (and all copies thereof) made or compiled by
Employee or made available to Employee concerning the business of Employer, its
subsidiaries or its affiliates shall be Employer's property and shall be
delivered to Employer promptly upon the termination of Employee's employment
with Employer, or at any other time on request.
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EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXXXX/CONTINENTAL WASTE INDUSTRIES, INC.
7.1.4 EMPLOYEES OF EMPLOYER. During Employee's
employment with Employer, and for a period of two years following the
termination (whether voluntary or involuntary) of Employee's employment with
Employer (the "Restricted Period"), Employee shall not, directly or indirectly,
solicit or encourage any employee of Employer, its subsidiaries or its
affiliates to leave the employment of Employer, its subsidiaries or its
affiliates.
7.2 RIGHTS AND REMEDIES UPON BREACH. If Employee breaches, or
threatens to commit a breach of, any of the provisions of Section 7.1 (the
"Restrictive Covenants"), Employer shall have the right to require Employee to
account for and pay over to Employer all compensation, profits, monies,
accruals, increments or other benefits (collectively, "Benefits") derived or
received by Employee as the result of any transactions constituting a breach of
any of the Restrictive Covenants, and Employee shall account for and pay over
such Benefits to Employer.
7.3 INJUNCTIVE RELIEF. Employee acknowledges that due to the
confidential nature of his employment relationship, any breach of the
Restrictive Covenants by Employee shall cause irreparable harm to Employer and
Employer may, at its option, obtain injunctive relief. Employee further
acknowledges that the scope and content of the Restrictive Covenants are
reasonable.
7.4 SEVERABILITY OF COVENANTS. If a Court of competent
jurisdiction determines that any of the Restrictive Covenants, or any part
thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants
shall not thereby be affected and shall be given full effect, without regard to
the invalid portions.
7.5 BLUE-PENCILLING. If a Court of competent jurisdiction
construes any of the Restrictive Covenants, or any part thereof, to be
unenforceable because of the duration of such provision or the area covered
thereby, such court shall have the power to reduce the duration or area of such
provision and, in its reduced form, such provision shall then be enforceable and
shall be enforced.
8 INDEMNIFICATION. Employer shall indemnify and defend Employee if
Employee is made a party, or threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that Employee is or was
an officer or director or employee of Employer or any of its subsidiaries or
affiliates, in which capacity Employee is or was serving, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement actually and
EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXXXX/CONTINENTAL WASTE INDUSTRIES, INC. PAGE 7 OF 9
reasonably incurred by him in connection with such action, suit or proceeding to
the fullest extent and in the manner set forth in and permitted by the general
corporation law of the state of incorporation of Employer, and any other
applicable law, as from time to time in effect.
9 NO CONFLICTING AGREEMENT. Employee represents and warrants that there
is no agreement, contract or understanding which would in any way restrict or
prohibit him from undertaking or performing his employment in accordance with
the terms and conditions of this Agreement.
10 EFFECTIVE DATE. This Agreement shall become effective as of April 1,
1994.
11 OTHER PROVISIONS.
11.1 NOTICES. Any notice or other communication required or which may
be given hereunder shall be in writing and shall be delivered personally
telegraphed or telexed, or sent by certified, registered or express mail,
postage prepaid, and shall be deemed given when so delivered personally,
telegraphed or telexed, or if mailed, two days after the date of mailing, as
follows:
(i) If to Employer:
Xxxxxx X. Xxxxxx
Continental Waste Industries, Inc.
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxx Xxxxxx 00000
(ii) If to Employee:
Employee's home address as indicated in the personal records of
Employer.
11.2 ENTIRE AGREEMENT. This Agreement contains the entire Agreement
between the parties with respect to the subject matter hereof and supersedes all
prior Agreements, written or oral, with respect thereto.
11.3 WAIVERS AND AMENDMENTS. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party or any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege
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XXXXXXX X. XXXXXXX/CONTINENTAL WASTE INDUSTRIES, INC. PAGE 8 OF 9
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder. This Agreement is subject to
amendment as circumstances relating to the development projects indicate, at the
mutual agreement of the parties.
11.4 GOVERNING LAW. The parties hereto have relied on New Jersey law
in negotiating this Agreement, which has been negotiated, prepared and executed
in New Jersey and it is expressly agreed that this Agreement shall be governed
and construed in accordance with the laws of the State of New Jersey applicable
to Agreements made and to be performed entirely within such State.
11.5 ASSIGNMENT. This Agreement, and the Employee's rights and
obligations hereunder, may not be assigned by Employee. Employer may assign
this Agreement and its rights, together with its obligations, hereunder in
connection with any sale, transfer or other disposition of all or substantially
all of its assets or business, whether by merger, consolidation or otherwise.
11.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
11.7 HEADINGS. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
CONTINENTAL WASTE INDUSTRIES,
INC.
/s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, Chairman and
Chief Operating Officer
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxx Employee
EMPLOYMENT AGREEMENT
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